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  • PNB MetLife Smart Child Plan

    PNB Metlife Life Insurance

    Overview

    The Smart Child life insurance policy is a unit linked policy where the policyholder is given a choice of 6 different funds to invest in. It also offers a 5 different modes to pay the premiums, one of which is the PSP (Payroll Savings Program). Investments in this PNB MetLife policy can be as little as Rs. 18,000 per annum and it offers a sum assured that is 10 times the annual premium paid. It also offers policyholders liquidity through partial withdrawals when they need funds.

    Eligibility Conditions of PNB MetLife Smart Child

    Entry age
    Min age Max age
    Life insured 18 years 55 years
    Beneficiary 90 days 17 years

    Key Features of PNB MetLife Smart Child

    Type Unit linked insurance plan
    Sum assured The sum assured can be 10 times the annual premium paid.
    Coverage Death benefits: In case the life insured passes away, the death benefits paid to the beneficiary are:
    • 100% of the sum assured is paid on death.
    • Instead of ending, the policy stays in force and future premiums are paid by PNB MetLife every month.

    Maturity benefits: The maturity benefits paid under this policy are:

    • 100% of the fund value can be withdrawn along with any loyalty additions as applicable.
    • The fund value can also be withdrawn in instalments as chosen by the policyholder.
    • They can also be withdrawn in a manner where a part of the maturity benefits are taken as a lump sum and the remainder in instalments.
    Basis ` Individual
    Premiums
    • Minimum premium payable towards this policy is Rs. 18,000 per annum.
    • The maximum premium payable in a year will depend on the age of the policyholder:
    Age group Maximum annual premium
    Up to the age of 35 years Rs. 2 lakhs
    36 years to 45 years Rs. 1.25 lakhs
    Above 45 years Rs. 1 lakh
    Premium paying term This is a regular pay policy therefore the premium paying term will be equal to the policy term.
    Premium paying modes There are 5 mode available for the payment of the premiums:
    • Annual
    • Semi-annual
    • Quarterly
    • Monthly
    • PSP (Payroll Savings Program)
    Policy term There are three options when it comes to the policy term:
    • 10 years
    • 15 years
    • 20 years
    Policy validity The validity is the same as the policy term
    Renewability Not applicable
    Bonuses This policy offers a loyalty addition for the longer policy terms.
    • 2% of the average fund value is added to the fund for policies with a 15 year term.
    • 3% of the average fund value will be added to the policy in case of policies with a term of 20 years.
    Other features
    • Freelook period: The freelook period for this policy is 15 days.
    • Grace period: The grace period is 30 days from the date on which the premium is due.
    • Lock in period: This policy has a lock-in period of 5 years.
    • If a policy is surrendered before the lock-in period is completed, the benefits will be paid only once the period is over.
    Add-on covers / Riders NA

    Benefits/Advantages of PNB MetLife Smart Child

    • Investments made into this policy will be eligible for tax benefits under section 80C of the IT Act of 1961.
    • This policy offers the payroll saving program as one of the modes to pay the premiums. Under this program, the premium amounts will be deducted directly from the policyholders salary.
    • In case the life insured passes away when the policy is still in effect, the company will waive off all future premiums and pay them every month themselves.
    • If the policyholder requires cash in a hurry he/she can make up to 2 partial withdrawals from this policy in one year.

    How The Plan Works?

    For the sake of understanding let us assume that Rajesh, who is 31 years old, decides to invest Rs. 2 lakhs every year in this policy. He selects a term of 15 years and opts to pay the premiums annually. Based on his investment, his benefits will be:

    • Sum assured: Rs. 20 lakhs
    • Maturity benefit: This will be value of the funds at the time of maturity of the policy.
    • Death benefits: If he passes away after the 4th year, it would mean that he has paid Rs. 8 lakhs worth of premiums. Premiums for the remaining 11 years will be paid by the insurer and the sum assured will be paid to his beneficiary.
    • When the policy matures it will be eligible for a 2% loyalty addition. This means that 2% of the average fund value over the 36 months preceding maturity will be added to the fund.
    • If he surrenders the policy in the 7th year then he will be allowed to withdraw the entire policy amount.
    • If he wishes to surrender it in the 3rd year, the policy will be terminated but the benefits will be paid only after 2 years (to complete the lock in period).

    Charges

    Service Charge
    Fund management charge
    • Preserver II: 1% per annum
    • Protector II: 1% per annum
    • Balancer II: 1.15% per annum
    • Virtue II: 1.25% per annum
    • Multiplier II: 1.25% per annum
    • Flexi Cap: 1.25% per annum
    • Discontinued funds: 0.5% per annum
    premium allocation charges
    • First year 7%
    • Second year 6%
    • Third year onwards 5%
    Switching charges
    • First four switches in a year will be free
    • Any additional switches will attract a charge of Rs. 250 per switch
    Partial withdrawal charges The first partial withdrawal will be free, the second one will be charged at Rs. 250.
    Policy administration charge
    • Year 1 to Year 5 - Rs. 10 per month
    • Year 6 onwards - Rs. 35 per month
    Premium discontinuance charge The premium discontinuance charges depend on the premium and the year or discontinuance:
    Year Premium below Rs. 25,000 p.a Premium above Rs. 25,000 p.a
    Year 1 Minimum of 20% of annual premium, 20% of the fund value and Rs. 3,000 Minimum of 6% of annual premium, 6% of the fund value and Rs. 6,000
    Year 2 Minimum of 15% of annual premium, 15% of the fund value and Rs. 2,000 Minimum of 4% of annual premium, 4% of the fund value and Rs. 5,000
    Year 3 Minimum of 10% of annual premium, 10% of the fund value and Rs. 1,500 Minimum of 3% of annual premium, 3% of the fund value and Rs. 4,000
    Year 4 Minimum of 5% of annual premium, 5% of the fund value and Rs. 1,000 Minimum of 2% of annual premium, 2% of the fund value and Rs. 2,000
    Year 5 and above Nil Nil

    Funds

    There are 6 funds in which investments can be made. Their objectives and risk factors are shown below.

    Fund Name Risk Rating Objective
    Preserver II Very low risk Income generation through securities issued by state and central governments.
    Protector II Low risk Regular income generation through investment in fixed income securities.
    Balancer II Medium risk Generate income through investments in securities and equity markets.
    Virtue II Very high risk Income generation from investments in companies promoting a healthy lifestyle.
    Multiplier II Very high risk Generate long term returns from investment in equities selected from CNX Nifty.
    Flexi Cap Very high risk Long term generation of returns through actively managed diverse portfolios.
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